Aave and Centrifuge Launch ‘Real World Assets’ Market

DeFi Trading

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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June 25, 2023

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Popular decentralized finance (DeFi) protocol Aave (AAVE) has partnered with decentralized operating system Centrifuge to launch a new market called Real World Assets (RWAs), which would enable users to earn yield against real-world assets.

Prior to this, Aave users could only borrow and lend digital assets, with rates varying based on demand and supply metrics. With this new market, users can now tokenize their real-life assets and use them as collateral to borrow cash.

“The RWA Market is a much needed building block not only for protocols such as Aave, but across DeFi as a whole,” Stani Kulechov, founder of Aave, was quoted in the announcement as saying. 

Aave is a decentralized lending system created on top of the Ethereum (ETH) blockchain that allows users to lend, borrow, and earn interest on digital currencies without the need for intermediaries.

For instance, users can lend DAI, a decentralized stablecoin pegged to the US dollar, and earn yield based on market demand. Similarly, they can borrow DAI at a specific cost by putting other digital assets like Etheruem as collateral.

Back in April, Centrifuge partnered with another DeFi lending protocol Maker (MKR), connecting DeFi lending with real world assets for the first time.

Centrifuge was launched in 2017. Centrifuge OS-based open DeFi protocol and marketplace for real-world asset pools Tinlake currently has nearly DAI 51.3m in total value locked (TVL), with a current estimated yield of just over 22% annually.

The protocol’s native token CFG is trading at USD 0.95 at 9:26 UTC. It’s down 9.2% in the last 24 hours and 5.9% in a week. 

At the same time, AAVE is changing hands at USD 249, having dropped just under 14% in a day. It’s up 33.4% in a week. 

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